Will expectations of a Euro-zone bailout of Greece trigger higher commodity prices?
*Reuters, by Christopher Johnson, February 11, 2010:
''Oil climbed to around $75 a barrel on Thursday, buoyed by hopes of
a rescue plan for the beleaguered Greek economy and by upbeat
predictions of oil demand growth by two major forecasters.
European Union leaders met in Brussels on Thursday to agree on a
financial bailout for Greece, a package that will demand deep fiscal
and economic adjustments by Athens.
The euro rose against the dollar on Thursday as investors increasingly
anticipated that the EU, led by Germany and France, would help Greece
avoid default.
In other supportive news, the International Energy Agency said on
Thursday global oil demand would grow by 120,000 barrels per day (bpd)
more than previously expected in 2010 to average 86.5 million bpd.
The forecast was in line with the latest projections from the U.S.
Energy Information Administration, which on Wednesday predicted world
oil demand would rise 1.2 million bpd in 2010.
The EIA also expects oil prices to average $81 a barrel in the second
half of the year, up 9 percent from current levels.
U.S. crude for March delivery jumped 61 cents to $75.13 a barrel by
1118 GMT, after settling 77 cents higher at $74.52 a barrel on
Wednesday. London Brent crude rose 75 cents to $73.29.
'Everyone is waiting for the outcome of today's EU summit on a rescue
for Greece,' said Carsten Fritsch, oil analyst at Commerzbank in
Frankfurt.
'The market hopes there will be a bailout, which would raise risk
appetite and should boost the euro against the dollar, both factors
that should support oil prices."
A bailout of Greece could alleviate worries about the fiscal health of
the euro zone, increasing demand for riskier assets such as commodities
and oil.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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